bonprix half-year results: Positive trend in Germany despite overall slowdown in sales growth

In the first half of the 2023/24 financial year, difficult economic conditions and continued consumer restraint characterised bonprix's international business. On a comparable basis*, this led to an overall decline in sales of eight per cent compared with the previous year, with a positive return (EBIT margin). However, bonprix bucked the current market trend in its home and core market of Germany, recording positive growth and closing the year with a four per cent increase in sales compared to the previous year.

The challenging macroeconomic environment is reflected in bonprix's half-year results for 2023/24, which paint a mixed picture overall. Several of the fashion company's markets have lost sales, while some have remained stable or recorded sales increases. "In many countries, we continue to see price sensitivity and reluctance to buy among our customers due to the crisis and inflation. This makes the development in our demanding core market of Germany all the more gratifying, where we were able to buck the downward market trend with a four per cent increase over the previous year. Our adjusted market and product strategy has really paid off here," says Dr Kai Heck, bonprix's managing director responsible for finance, summarising the business development.

Country development

Looking at the bonprix markets as a whole, different dynamics emerged in the first half of the 2023/24 financial year.

The DACH countries Switzerland and Austria delivered stable performance with low single-digit growth. Germany, as the largest market, achieved a four per cent increase in turnover compared to the previous year.

Difficult economic conditions primarily affected development in some Eastern European markets, but also in France and Italy. Declining consumer spending led to a single-digit to double-digit decline in sales in each case. Some European countries continued to develop positively on a low sales basis, including Slovenia and Finland.

Conditions in the highly competitive US market remain particularly challenging for the VENUS brand, which has seen a double-digit decline in sales. The digital transformation that has been initiated will be further accelerated here in order to unleash its power in ongoing business.

Strategic focus on digitalisation and product

By concentrating on strategic digitalisation topics, bonprix is continuing to invest in the future viability of its business model and, in addition to centralising processes in the European markets, is also placing a special focus on the product and the digitalisation of the entire value chain. Among other things, purely virtual 3D product design is to be almost completely dispensed with physical product samples by 2025. The flexibility and reduction in materials achieved in this way will make product development faster, more cost-efficient and more sustainable overall. By using new technologies and AI solutions in all areas, from sourcing and design to sales, the company aims to enable itself to optimally meet the needs of its international customers.

Outlook

The market environment remains challenging in the current second half of the 2023/24 financial year. In addition, the unusually warm September resulted in lower demand for seasonal clothing. Dr Richard Gottwald, CEO of bonprix and responsible for international sales, remains confident about the coming months: ‘The situation for online fashion retail remains tense, but our business model gives us an extremely solid foundation. I am therefore convinced that, despite these challenging times, we will see positive developments thanks to our flexible and highly efficiency-focused management of our international markets.’

*Excluding Russian business. The special charges resulting from the withdrawal from the Russian market will cause a further decline in sales of two percentage points (corresponding decline in sales including special charges = ten percent).